FG Seeks $1.25 Billion World Bank Loan in Second-Largest Financing Deal Under Tinubu
Nigeria Engages World Bank for Fresh $1.25 Billion Reform Loan
The Federal Government is advancing discussions with the World Bank for a proposed $1.25 billion loan facility designed to support reforms in electricity, digital services, agriculture, trade, and investment-led economic growth.
According to documents obtained by Nairametrics, the proposed facility titled Nigeria Actions for Investment and Jobs Acceleration is structured as a Development Policy Financing (DPF) operation with the Federal Ministry of Finance serving as the implementing agency. The World Bank is expected to consider approval of the facility on June 26, 2026.
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If approved, the financing would become the second-largest single World Bank loan secured by Nigeria under President Bola Ahmed Tinubu’s administration, behind the $1.5 billion Reforms for Economic Stabilisation to Enable Transformation (RESET) facility approved in June 2024.
Loan Targets Economic Growth and Investment Expansion
According to the World Bank Programme Information Document reviewed by Nairametrics, the proposed financing aims to strengthen access to finance, electricity, and digital services while supporting reforms intended to improve competitiveness across trade, taxation, and agriculture sectors.
The programme forms part of broader efforts by the Federal Government to transition from macroeconomic stabilisation toward inclusive growth and job creation following major economic reforms implemented since 2023.
The World Bank stated that the operation is intended to support Nigeria’s long-term growth ambitions through a private sector-led development model backed by public sector reforms.
According to the institution, the programme targets economic growth of approximately 7% through reforms aimed at improving market competitiveness, expanding access to credit, strengthening infrastructure, and increasing productivity across key sectors.
Electricity and Digital Infrastructure Form Key Components
The proposed loan package places significant emphasis on electricity access and digital economy reforms.
According to the World Bank document, the first pillar of the programme will focus on expanding access to finance, digital infrastructure, and electricity services. Planned reforms include support for the Investment and Securities Act 2025, operationalisation of credit enhancement facilities, implementation of the National Digital Economy and E-Governance Bill, and expansion of national metering frameworks.
The programme also seeks to encourage increased private sector participation in interconnected mini-grid systems and decentralised electricity infrastructure.
Analysts note that improving electricity reliability and digital infrastructure remains central to Nigeria’s broader economic diversification strategy, particularly as businesses continue to face high operating costs linked to power shortages and infrastructure deficits.
Trade and Agriculture Reforms Included
The second pillar of the programme will focus on improving competitiveness through reforms targeting trade, taxation, and agriculture.
According to the World Bank document, the proposed reforms include reducing trade barriers, simplifying agricultural seed certification systems, implementing VAT e-invoicing frameworks, and introducing a minimum effective corporate tax rate.
The institution stated that agricultural reforms are expected to improve productivity within key value chains such as maize, rice, and soybean production, while trade reforms could support export diversification and reduce inflationary pressure on imported goods.
Economic analysts note that agriculture remains critical to Nigeria’s inflation outlook and food security strategy, particularly amid ongoing efforts to stabilise commodity prices and improve domestic production.
World Bank Acknowledges Reform Progress Since 2023
The World Bank credited the Federal Government with implementing several major economic reforms since 2023, including fuel subsidy removal, foreign exchange market liberalisation, revenue administration reforms, and efforts to halt direct deficit financing by the Central Bank of Nigeria.
According to the institution, these reforms have contributed to improved fiscal stability, increased foreign reserves, narrower fiscal deficits, and improved investor confidence.
The Bank also noted that exchange rate volatility has moderated while revenue collection has improved following recent fiscal adjustments.
However, the institution warned that Nigeria’s economy has not yet fully transitioned into a high-growth and inclusive development phase.
Poverty and Structural Challenges Persist
Despite signs of macroeconomic stabilisation, the World Bank stated that Nigeria continues to face substantial structural economic challenges.
According to the document, economic growth remains modest relative to population expansion, with per capita income growth still below optimal levels. The Bank estimated that approximately 63% of Nigerians representing over 139 million people remained in poverty in 2025.
The institution identified shallow financial intermediation, weak infrastructure, low agricultural productivity, trade inefficiencies, and governance constraints as major obstacles affecting long-term economic growth.
Analysts note that while recent reforms have improved macroeconomic indicators, inflationary pressures and declining household purchasing power continue to affect living conditions across the country.
World Bank Flags High Risk Factors
Although the World Bank acknowledged progress in Nigeria’s reform programme, it classified the overall risk profile of the proposed operation as “high.”
The institution cited political and governance risks ahead of the 2027 general elections, vulnerability to oil price fluctuations, inflationary pressures linked to global geopolitical tensions, and possible reversals in fiscal reforms as key concerns.
Additional risks identified include weak institutional coordination, election-related spending pressures, fiduciary challenges, and social tensions associated with trade and economic reforms.
The assessment aligns with recent warnings from the Nigerian Economic Summit Group (NESG), which stated that Nigeria remains within a high-risk debt zone despite fiscal stabilisation improvements.
Nigeria’s World Bank Exposure Continues to Rise
Nairametrics estimates that Nigeria has secured approximately $9.35 billion in World Bank loan approvals between June 2023 and May 2026 under the Tinubu administration.
If the proposed facility is approved, total World Bank financing approvals under the current administration could rise to approximately $10.6 billion.
According to earlier data cited by Nairametrics, the World Bank remains Nigeria’s largest multilateral creditor, accounting for a substantial share of the country’s external debt obligations.
The rising dependence on multilateral financing continues to generate debate among economists regarding debt sustainability, fiscal consolidation, and long-term economic resilience.
Government Pushes for Faster Loan Approvals
The proposed financing also comes amid growing concerns within the Federal Government over delays in multilateral loan approvals and disbursements.
Last week, Accountant-General of the Federation Dr Shamseldeen Ogunjimi warned that Nigeria could reconsider World Bank financing arrangements if approval and disbursement timelines remain excessively prolonged.
Ogunjimi stated that the funds being sought from the World Bank are loans rather than grants and emphasised the importance of timely processing to support Nigeria’s development priorities.
Analysts note that prolonged delays in multilateral financing approvals can affect budget execution, infrastructure projects, and economic reform implementation.
Nigeria’s proposed $1.25 billion World Bank facility underscores the Federal Government’s continued reliance on multilateral financing to support economic reforms, infrastructure development, and investment-led growth.
While the programme could strengthen electricity access, digital infrastructure, agricultural productivity, and private sector competitiveness, it also raises renewed questions regarding debt sustainability, fiscal discipline, and the long-term effectiveness of externally financed reform programmes.
As negotiations progress ahead of the proposed June 2026 approval date, policymakers, investors, and economic stakeholders will closely monitor both the financing terms and the implementation capacity of the proposed reforms.
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